In the past six years, the government-owned, sort-of-independent company has added seven ships.

That includes five big ones: the German-built Coastal Celebration, Coastal Inspiration and Coastal Renaissance and, way up the coast, the Northern Adventure and Northern Expedition.

Long gone are the Queen of Asbestos class of vessels, the kind where passengers would climb a too-narrow stairwell from the car decks, only to emerge into what appeared to be a 1960s bus depot, mysterious grey stuff hanging from the ceilings.

Not everyone likes to see well-appointed ferries. Some mutter about the cost of building “cruise ships” instead of spartan commuter barges.

But at BC Ferries, they’ll tell you those criticisms are off the mark, that the cost of adding comfy chairs and wall-mounted televisions is relatively insignificant. The big money is in the propulsion system and other below-decks costs.

As for “frills” like the restaurants and gift shops, they make a tidy profit, pulling in $75 million a year — close to 10 per cent of BC Ferries’ total revenue. Besides, the people who work in them have to be there whether they’re flipping Triple O burgers or selling magazines. On-board staffing is dictated by federal transportation safety rules.

Likewise, the corporation has little say in where or how often its ships sail; that’s all laid out in its contract with the provincial government. Not much it can do about fuel prices, either.

The result is that the great bulk of BC Ferries’ costs are beyond its control.

Meanwhile, it operates with a level of government subsidy far lower than that of comparable ferry systems, with the province stubbornly pushing BC Ferries toward a user-pay model even as critics scream that rising fares are pushing ridership — and therefore revenue — down.

As it wriggles away in this straitjacket, more financial pressures are coming. The big ships on the major routes have been replaced, but many of those on the intermediate and minor runs have passed their best-before date.

The question then, as the corporation heads into Phase 2 of its fleet-renewal program, is how they’re going to pay for it all.

Having spent $1.9 billion on capital projects (ships, docks, terminals and the like) in the past decade, the corporation is already carrying $1.4 billion in debt. It needs to reduce spending — which means cutting service — or increase revenue, either via a higher subsidy or more money from customers. The math isn’t hard, just hard to swallow. “If people don’t want their service reduced and government doesn’t want to reduce service, and government doesn’t want to put more money into the system, then fares have to go up,” Corrigan says.

Building new ships isn’t cheap. “The biggest challenge to constraining fare increases in the B.C. Ferry system is the huge increase in capital spending that is forecast over (the next dozen years),” noted the B.C. Ferry Commission’s 2012 review of the province’s Coastal Ferry Act.

In fact, capital costs are roughly equal to the federal and provincial subsidies, which make up about a quarter of the overall budget.

The ferry commission’s review estimated it would cost $2.5 billion over the next dozen years to upgrade terminals and build new ships similar to those being retired.

The corporation thinks it can do so more cheaply by building a single model of mid-sized ferry for use on its intermediate routes. Having six to eight similar vessels would cut design costs, allow ships to be moved from route to route and provide other savings associated with standardization. It’s the same reason airlines like to fly only a few types of planes.

As it is, 17 classes of vessels are represented in BC Ferries’ 35-ship fleet. Many simply don’t match the demand on the routes they sail. “We want to get down to four or five classes,” Corrigan says.

The commission has given the corporation approval to build the first three intermediate-sized ships. Two 145-car, 600-passenger vessels will replace the aging 192-car Queen of Burnaby on the Comox-Powell River run and the same-sized Queen of Nanaimo on the Tsawwassen-Southern Gulf Islands route. The third will be added to the latter service in busier times. The first two ships are due in 2016, the third in 2017.

“We’re building ships that we think are the right size going into the future,” Corrigan says.

BC Ferries also hopes liquefied natural gas could cut its fuel spending, which currently makes up a fifth of its operating budget. “That could be a major game-changer for us,” Corrigan says. If projections hold true, LNG would be 50- to 60-per-cent cheaper than diesel, but conversion costs would be massive. The truth, though, is that no matter how much costs are cut, some routes will never be self-sufficient. The corporation says 22 of 25 routes — all except the major runs from Vancouver to the Island — will always need subsidies. The long, northern routes bleed red.

That reality can’t be reconciled with the government’s user-pay philosophy, not unless the Liberals want to follow Newfoundland’s lead and depopulate coastal communities, says North Island MLA Clare Trevena, the New Democrats’ ferries critic. Trevena wants the government to share W.A.C. Bennett’s original vision of BC Ferries as an integral part of our economic infrastructure. “The view used to be that ferries were extremely necessary for the economic good of our province.

“The government has really abdicated responsibility,” she says. “There is really no vision for BC Ferries from the government.”

That sentiment was echoed in the ferry commission’s review of the Coastal Ferry Act: “There does not appear to be a long-term vision for coastal ferry services nor any forecast of long-term demand.”

It wasn’t exactly smooth sailing when the corporation was more directly under government control, though. Back then, capital-spending decisions were largely political, with BC Ferries fighting for elbow room at the funding table with everyone else in the public sector.

“We had to line up behind universities, schools and hospitals, and you don’t win that battle,” Corrigan says.

Remember that before the Liberals cut the corporation loose, they wrote off $1.1 billion in debt, including half a billion from the NDP’s fast-ferries fiasco.

“If it was a private company, it would have been declared bankrupt,” Corrigan says.

Comments

We encourage all readers to share their views on our articles and blog posts. We are committed to maintaining a lively but civil forum for discussion, so we ask you to avoid personal attacks, and please keep your comments relevant and respectful. If you encounter a comment that is abusive, click the "X" in the upper right corner of the comment box to report spam or abuse. We are using Facebook commenting. Visit our FAQ page for more information.

First in a seven-part series Around 2 a.m. on Saturday, April 23, 1983, Phillip Tallio was sitting in the kitchen at a house party catching up with a relative he hadn’t seen in years. According to court documents recently made public, he told her how excited he was to learn he was going to have a […]

Almost Done!

Postmedia wants to improve your reading experience as well as share the best deals and promotions from our advertisers with you. The information below will be used to optimize the content and make ads across the network more relevant to you. You can always change the information you share with us by editing your profile.

By clicking "Create Account", I hearby grant permission to Postmedia to use my account information to create my account.

I also accept and agree to be bound by Postmedia's Terms and Conditions with respect to my use of the Site and I have read and understand Postmedia's Privacy Statement. I consent to the collection, use, maintenance, and disclosure of my information in accordance with the Postmedia's Privacy Policy.

Postmedia wants to improve your reading experience as well as share the best deals and promotions from our advertisers with you. The information below will be used to optimize the content and make ads across the network more relevant to you. You can always change the information you share with us by editing your profile.

By clicking "Create Account", I hearby grant permission to Postmedia to use my account information to create my account.

I also accept and agree to be bound by Postmedia's Terms and Conditions with respect to my use of the Site and I have read and understand Postmedia's Privacy Statement. I consent to the collection, use, maintenance, and disclosure of my information in accordance with the Postmedia's Privacy Policy.